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Nvidia's AI Rally Isn't a Bubble, It's Built on Real Demand, Analysts Say Ahead of Q3 Results

MarketDash Editorial Team
19 days ago
As Nvidia prepares to report third-quarter earnings Wednesday, top analysts are pushing back hard against bubble fears, arguing the AI trade is grounded in genuine enterprise spending rather than hype-fueled momentum.

With Nvidia Corp. (NVDA) set to report third-quarter earnings Wednesday, you might expect some nervousness given all the bubble chatter floating around. Instead, leading analysts are going the other direction entirely, insisting the AI rally has plenty of room to run because it's backed by actual corporate spending, not dot-com style delusion.

This Doesn't Look Like the 1990s

Nancy Tengler, CIO of Laffer Tengler Investments, would know a bubble if she saw one. She managed money through the dot-com disaster, and appearing on Yahoo Finance's 'Morning Brief' Tuesday, she made her position clear: what's happening now "didn't look at all like this." Back in the late 1990s, the highest flyers were "companies with no earnings." Today's AI leaders, by contrast, are printing money.

Tengler still keeps Nvidia at the core of her portfolio, and she's not losing sleep over it. The AI trade, she argues, is rooted in tangible enterprise demand rather than momentum-chasing speculation. Her verdict? "Not a bubble."

Sure, there's always a risk of overcapacity when everyone rushes into the same space. But Tengler isn't seeing warning signs yet. "It doesn't look like it yet, and it doesn't look like it for the foreseeable future," she said.

Strong Results Are Expected, But Margins Matter More

Shay Boloor, Chief Market Strategist at The Futurum Group, put it bluntly: "the Street already knows that NVIDIA's results will be strong." The real question isn't revenue, it's whether the company can maintain or expand its guided 74% margins while ramping up system shipments.

"If it can hold or expand at that level while shipping more systems," Boloor explained, it would signal to investors "that the stock will maintain its current value" as the world's most valuable company, sitting at a market cap of $3.63 trillion.

Beyond data centers, Boloor highlighted several secular growth drivers that are just starting to kick in. He pointed to Tesla Inc.'s (TSLA) Full Self-Driving system, Alphabet Inc.'s (GOOG) Waymo, and humanoid robotics platforms like Optimus. These aren't fringe experiments anymore. They're reinforcing Nvidia's position as the foundational infrastructure layer for the next generation of intelligent systems.

Nvidia as Economic Bellwether

Investor Ross Gerber of Gerber Kawasaki Wealth and Investment Management said Tuesday in a post on X that Nvidia's earnings will reveal to markets just "how big the AI opportunity" really is.

Gerber is essentially treating Nvidia as a litmus test, not just for the trillion-dollar AI trade, but for the broader economy's health. He's drawing parallels to how he views Home Depot Inc.'s (HD) third-quarter results on Tuesday as a signal for whether the Federal Reserve should cut interest rates.

Path to 32% Upside

Parkev Tatevosian, CFA, an independent investor and YouTuber, is seeing meaningful contributions ahead from Nvidia's latest Blackwell GPUs, plus emerging tailwinds from automotive applications as driver-assistance and autonomous systems begin scaling up.

Factor in the company's deepening partnerships with big-tech hyperscalers, and Tatevosian believes the intrinsic value per share should rise "from around $190 per share up to $240 per share," which works out to a 32% upside from current levels.

Even with a margin of safety built into that calculation, he describes the stock as "fairly valued at these valuations," suggesting there's upside without excessive risk.

Stock Movement Ahead of the Big Day

Nvidia shares dropped 2.81% Tuesday, closing at $181.36, though they edged up 0.18% in overnight trading ahead of Wednesday's results. Year-to-date, the stock is up 31.13% and trades at 26.95 times forward earnings and 27.06 times sales.

The stock scores high on momentum, growth, and quality metrics, with favorable price trends in both medium and long-term timeframes. It remains one of the most closely watched stocks in the market, and Wednesday's report will likely set the tone for the broader AI sector heading into year-end.

Back to News

Nvidia's AI Rally Isn't a Bubble, It's Built on Real Demand, Analysts Say Ahead of Q3 Results

MarketDash Editorial Team
19 days ago
As Nvidia prepares to report third-quarter earnings Wednesday, top analysts are pushing back hard against bubble fears, arguing the AI trade is grounded in genuine enterprise spending rather than hype-fueled momentum.

With Nvidia Corp. (NVDA) set to report third-quarter earnings Wednesday, you might expect some nervousness given all the bubble chatter floating around. Instead, leading analysts are going the other direction entirely, insisting the AI rally has plenty of room to run because it's backed by actual corporate spending, not dot-com style delusion.

This Doesn't Look Like the 1990s

Nancy Tengler, CIO of Laffer Tengler Investments, would know a bubble if she saw one. She managed money through the dot-com disaster, and appearing on Yahoo Finance's 'Morning Brief' Tuesday, she made her position clear: what's happening now "didn't look at all like this." Back in the late 1990s, the highest flyers were "companies with no earnings." Today's AI leaders, by contrast, are printing money.

Tengler still keeps Nvidia at the core of her portfolio, and she's not losing sleep over it. The AI trade, she argues, is rooted in tangible enterprise demand rather than momentum-chasing speculation. Her verdict? "Not a bubble."

Sure, there's always a risk of overcapacity when everyone rushes into the same space. But Tengler isn't seeing warning signs yet. "It doesn't look like it yet, and it doesn't look like it for the foreseeable future," she said.

Strong Results Are Expected, But Margins Matter More

Shay Boloor, Chief Market Strategist at The Futurum Group, put it bluntly: "the Street already knows that NVIDIA's results will be strong." The real question isn't revenue, it's whether the company can maintain or expand its guided 74% margins while ramping up system shipments.

"If it can hold or expand at that level while shipping more systems," Boloor explained, it would signal to investors "that the stock will maintain its current value" as the world's most valuable company, sitting at a market cap of $3.63 trillion.

Beyond data centers, Boloor highlighted several secular growth drivers that are just starting to kick in. He pointed to Tesla Inc.'s (TSLA) Full Self-Driving system, Alphabet Inc.'s (GOOG) Waymo, and humanoid robotics platforms like Optimus. These aren't fringe experiments anymore. They're reinforcing Nvidia's position as the foundational infrastructure layer for the next generation of intelligent systems.

Nvidia as Economic Bellwether

Investor Ross Gerber of Gerber Kawasaki Wealth and Investment Management said Tuesday in a post on X that Nvidia's earnings will reveal to markets just "how big the AI opportunity" really is.

Gerber is essentially treating Nvidia as a litmus test, not just for the trillion-dollar AI trade, but for the broader economy's health. He's drawing parallels to how he views Home Depot Inc.'s (HD) third-quarter results on Tuesday as a signal for whether the Federal Reserve should cut interest rates.

Path to 32% Upside

Parkev Tatevosian, CFA, an independent investor and YouTuber, is seeing meaningful contributions ahead from Nvidia's latest Blackwell GPUs, plus emerging tailwinds from automotive applications as driver-assistance and autonomous systems begin scaling up.

Factor in the company's deepening partnerships with big-tech hyperscalers, and Tatevosian believes the intrinsic value per share should rise "from around $190 per share up to $240 per share," which works out to a 32% upside from current levels.

Even with a margin of safety built into that calculation, he describes the stock as "fairly valued at these valuations," suggesting there's upside without excessive risk.

Stock Movement Ahead of the Big Day

Nvidia shares dropped 2.81% Tuesday, closing at $181.36, though they edged up 0.18% in overnight trading ahead of Wednesday's results. Year-to-date, the stock is up 31.13% and trades at 26.95 times forward earnings and 27.06 times sales.

The stock scores high on momentum, growth, and quality metrics, with favorable price trends in both medium and long-term timeframes. It remains one of the most closely watched stocks in the market, and Wednesday's report will likely set the tone for the broader AI sector heading into year-end.